{"id":7699,"date":"2022-10-31T12:02:20","date_gmt":"2022-10-31T01:32:20","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/why-long-term-investing-works\/"},"modified":"2022-10-31T12:02:20","modified_gmt":"2022-10-31T01:32:20","slug":"why-long-term-investing-works","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/why-long-term-investing-works\/","title":{"rendered":"Why long-term investing works"},"content":{"rendered":"<div>\n<h3>Key takeaways<\/h3>\n<ul>\n<li>\n<p>One of the main benefits of long-term investing is that it has proven to deliver returns<\/p>\n<\/li>\n<li>\n<p>If you hold shares for years, you\u2019re going to incur much lower expenses than a short-term trader<\/p>\n<\/li>\n<li>\n<p>Another advantage of time is that if an unforeseen event does occur, you\u2019re able to hold your investments until markets recover.<\/p>\n<\/li>\n<\/ul>\n<p><img decoding=\"async\" loading=\"lazy\" alt=\"\" height=\"300\" src=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2022\/10\/Shares__why_long-term_investing_works.png\" width=\"570\"><\/p>\n<p>Some people invest in shares with a short-term view, looking to take advantage of small movements in share prices to pick up quick wins.<\/p>\n<p>While this approach \u2013 also known as share-trading \u2013 might pay off if you\u2019ve got the luck, expertise, and time to do it, the risks of short-term investing are high and can often outweigh the rewards.<\/p>\n<p>So, if you\u2019re looking to use the sharemarket to grow your wealth over time, you\u2019ve come to the right place.<br \/>\u00a0<\/p>\n<h3>Key benefits of long-term investing<\/h3>\n<p>There are many reasons to believe a long-term approach is effective.<\/p>\n<p>As one of the world\u2019s most famous investors Warren Buffett has advocates: \u201cOnly buy something that you\u2019d be perfectly happy to hold if the market shut down for 10 years\u201d.<\/p>\n<p><strong>Strong performance<\/strong><\/p>\n<p>One of the main benefits of long-term investing is that it has proven to deliver returns.<\/p>\n<p>According to analysis from Credit Suisse, Australian shares have given their investors an average annual return of 6.7% per year since 1900.1\u00a0That makes us the second best performing sharemarket in the world over 120 years.<span style=\"font-size: 0.75em\">\u00a0<\/span><\/p>\n<p><strong>Lower fees and costs<\/strong><\/p>\n<p>Lower transaction costs are a key advantage of long-term investing\u2014and that translates into higher returns.<\/p>\n<p>Transaction costs\u2014the price you pay to invest your money in a company\u2019s shares\u2014are often overlooked.<\/p>\n<p>There are transaction fees involved with investing in shares, including brokerage. But these are only triggered when you buy or sell. If you hold shares for years, you\u2019re going to incur much lower expenses than a short-term trader. \u00a0<\/p>\n<p>Another factor to consider is Capital Gains Tax. You pay tax on any returns you make from your original investment, charged at your marginal tax rate (could be up to 47% including Medicare levy). If you hold your shares for at least 12 months however, you may be eligible for tax concessions.<\/p>\n<h3>Seek help from a professional<\/h3>\n<p>If you value the experience of experts in other aspects of your life, don\u2019t discount it when it comes to managing your life savings.<\/p>\n<p>A financial coach is not just someone who helps with investments. Their job is to help you with every aspect of your financial life\u2014savings, insurance, tax, debt\u2014while keeping you on track to achieve your goals.<\/p>\n<p>More importantly, they can answer questions like:<\/p>\n<ul>\n<li>\n<p>What age can I stop working and retire?<\/p>\n<\/li>\n<li>\n<p>What strategies can I use to build my wealth?<\/p>\n<\/li>\n<li>\n<p>How can I ensure my wealth is transferred to my children?<\/p>\n<\/li>\n<\/ul>\n<p>If your to-do list is endless and you never quite have time to tackle your personal finances, a financial coach may help to set you on the right track.<\/p>\n<p><strong>Riding out the rough times<\/strong><\/p>\n<p>As we\u2019ve seen recently with COVID, the Ukraine war and rising inflation, it\u2019s extremely difficult to predict what\u2019s going to happen in the next month or year.<\/p>\n<p>Disruptions to sharemarkets happen all the time, from the 1987 Stock Market Crash, the bursting of the Tech Bubble in 2000, to the Global Financial Crisis in 2007. Each trigger is different and the time it takes to recover varies too.<\/p>\n<p>So, investing in shares with a long-term approach puts time on your side. Generally speaking, shares outperform many other investments over the long-term meaning your chance of a negative return gets lower the longer you invest.<\/p>\n<p>The other advantage of time, is that if an unforeseen event does occur, you\u2019re able to hold your investments until markets recover. So, always consider what your objectives are and your investment timeframe.<span style=\"font-size: 0.75em\">\u00a0<\/span><\/p>\n<p><strong>Emotional side of investing<\/strong><\/p>\n<p>While it\u2019s good to know the facts, it\u2019s also important to acknowledge the emotional side of investing too. Sometimes we react irrationally when events cause anxiety. This means we may set out to invest for the long-term, but instead react to short-term market volatility like selling out in a crisis.<\/p>\n<p>That\u2019s one good reason to work with a financial adviser. We can help instil some discipline into your long-term investing strategy. And that means the strategy has more chance of delivering the returns you need.<span style=\"font-size: 0.75em\">\u00a0<\/span><\/p>\n<p>Bottom line: If you can afford to put your money away for a lengthy period, you\u2019re more likely to reduce your risk and maximise your chances of returns. Patience pays.<\/p>\n<p><span style=\"font-size: 10px\">Source: <a href=\"https:\/\/www.mlc.com.au\/personal\/blog\/2022\/09\/shares-why-long-term-investing-works\" target=\"_blank\" rel=\"noopener\">MLC August 2022<\/a><\/span><\/p>\n<p><span style=\"font-size: 10px\">1\u00a0Livewire: Australian market wins gold- 5 March 2019<\/span><br \/><span style=\"text-decoration: underline;font-size: 10px\"><a href=\"https:\/\/www.livewiremarkets.com\/wires\/australian-sharemarket-wins-gold\" target=\"_blank\" rel=\"noopener\">https:\/\/www.livewiremarkets.com\/wires\/australian-sharemarket-wins-gold<\/a><\/span><\/p>\n<p><span style=\"font-size: 10px\">Important information and disclaimer<\/span><\/p>\n<p><span style=\"font-size: 10px\">This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (\u2018Insignia Financial Group\u2019). The information in this article is current as at August 2022 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.<\/span><\/p>\n<p>The post <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/latest-articles\/why-long-term-investing-works\">Why long-term investing works<\/a> appeared first on <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/\">MLC Contemporary<\/a>.<\/p>\n<\/div>\n<p class=\"wpematico_credit\"><small>Powered by <a href=\"http:\/\/www.wpematico.com\" target=\"_blank\" rel=\"noopener\">WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key takeaways One of the main benefits of long-term investing is that it has proven to deliver returns If you&#8230;<\/p>\n","protected":false},"author":4,"featured_media":7700,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - 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